Revenue riddles

Context:

According to the recent estimates, India's Goods and Services Tax (GST) collections are expressing concerns over slowing growth and anomalies in import-related revenues.

Concerns about GST Revenues

Slowing Growth Trend: GST collections in September 2023 showed a slowdown, with a growth rate of 10.2%, the lowest since July 2021.
Factors Contributing to Slowdown: The growth in revenues from domestic transactions and services imports has decreased from 18% in June to 14% over the past two months.
Impact of Pending Dues and E-Invoicing: September's revenues included pending dues from businesses since the GST regime's inception in 2017-18. Mandatory e-invoicing for firms with turnovers above ?5 crore since August 1 also affected compliance.

Analyzing Trends

Shrinking Goods Imports Revenues: Revenues from goods imports have decreased significantly this year, raising concerns about possible revenue leakages.
Anomalies in Import-Related Revenues: Despite a surge in goods imports to a nine-month high of $58.6 billion in August, revenues collected in September were 5.7% lower than the previous month.
Need for Deeper Investigation: Authorities should conduct a thorough investigation to identify potential revenue leaks in the import sector.

Macroeconomic Resilience

Positive Fiscal Outlook: India's GST revenues for 2023-24 stand at over ?9.92 lakh crore, showing an 11.1% increase over the previous year, with average monthly revenues of ?1,65,418 crore.
Festive Season Boost: The ongoing festive season is expected to maintain collections above ?1.6 lakh crore this quarter, providing a comfortable margin for the government.
Anticipated Slowdown in Q1 2024: The central bank expects a slowdown in real GDP growth to 5.7% in the January-March 2024 quarter, prompting the need for careful fiscal planning.

You must be logged in to get greater insights.

Zoned Out

Economy Trade and Commerce

Government must handhold semi-conductor industry

Economy Economic Sectors

Supreme Court gave a split verdict on plea to ‘Recall Termination Of 26-Week Foetus’

Polity & Governance Fundamental Rights

Karnataka’s Information Disorder Tackling Unit

Polity & Governance State Legislature

Dismal picture of Information Commissions in India

Polity & Governance Constitutional & Non-Constitutional Bodies

Why electoral bonds scheme has been challenged in Supreme Court?